Saga Communications, Inc. Reports 2nd Quarter 2010 Results

GROSSE POINTE FARMS, Mich., Aug. 13 /PRNewswire-FirstCall/ -- Saga Communications, Inc. (NYSE Amex: SGA) today reported the Company’s net income for the second quarter was $3.7 million ($.87 per fully diluted share) compared to $2.7 million ($0.63 per fully diluted share) for the same period last year.  Net operating revenue for the quarter ended June 30, 2010 increased 4.0% to $32.9 million with operating income of $7.8 million compared to $6.2 million for the second quarter of last year.  Free cash flow was $5.7 million for the quarter. Station operating expense decreased 0.6% compared to the same period last year to $23.2 million (station operating expense includes depreciation and amortization attributable to the stations). Operating expenses for the quarter were impacted by increased advertising and promotions expenditures as well as increased sales costs relative to the Company’s reported revenue growth.        

For the six month period ended June 30, 2010, free cash flow increased 15.7% to $8.0 million.  Net operating revenue increased 5.4% from the comparable period in 2009 to $60.9 million with operating income of $11.4 million compared to $6.3 million for the same period last year.  Net income was $7.0 million ($1.66 per fully diluted share) compared to $2.3 million ($.55 per fully diluted share) for the comparable period in 2009.  For the same period, station operating expense decreased 3.2% to $45.7 million (station operating expense includes depreciation and amortization attributable to the stations).  

The Company continues to maintain a solid balance sheet with $18.1 million in cash and certificate of deposit balances as of June 30, 2010.  As of June 30, 2010, the Company’s outstanding bank debt was $113.6 million.  The trailing 12 month leverage ratio calculated as a multiple of EBITDA was 3.5 times.  Netting cash and certificate of deposits against outstanding debt, the ratio would be 2.9 times.  Subsequent to the end of the quarter the Company paid down debt by an additional $4 million.  The Company intends to continue to use excess cash to pay down debt.  

Capital expenditures in the second quarter of 2010 were $1.3 million compared to $1.5 million for the same period last year.  For the 6 months ended June 30, 2010, capital expenditures were $2.2 million compared to $2.6 million for the comparable period last year.  For the 2009 fiscal year total capital expenditures were $4.0 million.  The Company currently expects to spend approximately $4.5 – $5.0 million for capital expenditures during 2010.  

Saga Communications utilizes certain financial measures that are not calculated in accordance with generally accepted accounting principles (GAAP) to assess its financial performance.  Such non-GAAP measures include free cash flow, trailing 12 month consolidated EBITDA, and leverage ratio. These non-GAAP measures are generally recognized by the broadcasting industry as measures of performance and are used by Saga to assess its financial performance including but not limited to evaluating individual station and market-level performance, evaluating overall operations, as a primary measure for incentive based compensation of executives and other members of management and as a measure of financial position.  Saga’s management believes these non-GAAP measures are used by analysts who report on the industry and by investors to provide meaningful comparisons between broadcasting groups, as well as an indicator of their market value.  These measures are not measures of liquidity or of performance in accordance with GAAP, and should be viewed as a supplement to and not as a substitute for the results of operations presented on a GAAP basis including net operating revenue, operating income, and net income. Reconciliations for all of the non-GAAP financial measures to the most directly comparable GAAP measure are attached in the Selected Supplemental Financial Data table.

Saga Communications, Inc. is a broadcasting company whose business is devoted to acquiring, developing and operating broadcast properties.  The Company owns or operates broadcast properties in 26 markets, including 61 FM and 30 AM radio stations, 3 state radio networks, 2 farm radio networks, 5 television stations and 4 low-power television stations.  For additional information, contact us at (313) 886-7070 or visit our website at www.sagacommunications.com.

Saga’s 2nd Quarter 2010 conference call will be on Friday, August 13, 2010 at 2:00 p.m. EDT.  The dial-in number for domestic and international calls is (612) 332-0107.  The call can be replayed for 7 days by calling domestically (800) 475-6701 and referring to access code 165196.  The replay can be accessed internationally by calling 320/365-3844 and using the same access code.

The Company requests that all parties that have a question that they would like to submit to the Company to please email the inquiry by 1:00 p.m. EDT on August 13, 2010 to [email protected]. The Company will discuss, during the limited period of the conference call, those inquiries it deems of general relevance and interest. Only inquiries made in compliance with the foregoing will be discussed during the call.

This press release contains certain forward-looking statements that are based upon current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.  Words such as “believes,” “expects,” “anticipates,” “guidance” and similar expressions are intended to identify forward-looking statements.  Key risks, including risks associated with Saga’s ability to effectively integrate the stations it acquires and the impact of federal regulation on Saga’s business, are described in the reports Saga Communications, Inc. periodically files with the U.S. Securities and Exchange Commission, including Item 1A of our Annual Report on Form 10-K.  Readers should note that these statements may be impacted by several factors, including national and local economic changes and changes in the radio and television broadcast industry in general, as well as Saga’s actual performance.  Results may vary from those stated herein and Saga undertakes no obligation to update the information contained here.

SOURCE Saga Communications